When a property is unoccupied, any existing property and contents insurance covering it might lapse – unless steps are taken to prevent it.
Here is a brief overview of the potential issue and the solution.
When the status of a property changes
A property is regarded, in insurance terms, as being unoccupied if nobody is residing in it.
The exact definitions may vary from one insurer to another. Typically though, most policy providers will consider that a property has transitioned to being unoccupied if:
- nobody has resided there for a period of somewhere between 30-60 consecutive days.
It’s worth noting that this is taken to mean using the property as your normal place of residence. So, if your property is unoccupied because you’re overseas, asking a friend to sleep overnight there once a fortnight typically won’t qualify as occupation.
Other relatively commonplace circumstances that can lead to a property becoming unoccupied include:
- the death of the owner and the property’s move into probate;
- long-term professional assignments overseas;
- extended sabbaticals away from home;
- renovations requiring the property to be vacated (this may or may not be a different insurance category, depending upon the individual insurer).
Why this matters to insurers
When a property is empty, it’s typically far more vulnerable to a range of specific risks than would normally be the case if someone is in residence.
Many of these are self-evident and include things such as:
- vandalism, burglary and perhaps squatters;
- accumulative damage arising from things such as unnoticed leaks or the ingress of rainwater;
As a result, in a standard owner-occupier policy, insurers typically include cover for unoccupied properties for up to only a specified and limited number of days. That period is usually seen as being sufficient to cope with normal holidays, business trips and long weekends. Once it’s exceeded, the cover offered by a standard policy may be restricted.
Note that this condition typically also applies to buy-to-let type properties which might be standing unoccupied due to things such as delays in finding new tenants.
Another point well worth noting is that this condition applies irrespective of whether your property is unfurnished or furnished.
In order to maintain continuity of cover in such circumstances, you will need to take out what’s called unoccupied property insurance for the property concerned.
The name is self-explanatory but this isn’t just the same cover as ordinary owner-occupier insurance under a different name. There are important differences:
- unoccupied property insurance typically brings with it certain requirements of the policyholder. They might include the need to arrange for regular inspections of the property whilst unoccupied and the maintenance of a journal etc. There may also be specifications relating to water and gas supplies and disconnections;
- there may be requirements relating to the need to try and hide the fact, where possible, that your property is unoccupied. That might involve needing to keep garden areas tidy and having lights on timers etc.
You should read the cover carefully to make sure that you’ll be in compliance.
It’s also worth noting that the cover provided by such policies may vary from one insurer to another. Some may offer relatively limited cover but others may have more substantial forms of unoccupied property insurance available covering things such as subsidence and vandalism – which are by no means included on all such policies.
It’s worth guarding against the dangers of assuming this type of cover is just a minor tweaking of your protection and something you may choose to take a chance with.
As a homeowner, you may be under a contractually-binding obligation in your mortgage agreement to ensure that full insurance is kept in place at all times. If you’re administering a deceased person’s estate, you might be under a legal obligation to protect the interests of that estate and its beneficiaries.
So, it’s worth taking this matter seriously if you think a property is going to become unoccupied in insurance terms.